Tracker, Financial Services Regulation & Compliance - Cross Sectoral

In November 2014 the Central Bank launched a consultation paper on draft regulations that it was proposing to introduce for credit unions when the remaining sections of the Credit Union and Co-operation with Overseas Regulators Act 2012 (“the 2012 Act”) are commenced. On 31 July the Central Bank published its feedback statement to the Consultation and published the final regulations proposed to commence on 31 December, 2015. The regulations cover a number of areas including reserves, liquidity, lending, investments, savings and borrowings, and build upon existing prudential and governance requirements. Transitional provisions are included.

Voluntary redress scheme for AIB customers

As a result of a review of its card insurance policies AIB found that customers may have been provided with insufficient information when they purchased a credit card insurance product. AIB discovered that a Cardif Pinnacle card protection insurance product offered to customers in their AIB credit card application was not required, as customers were already covered for amounts greater than €75 under the terms and conditions of their credit card. The Central Bank has confirmed that it has been engaging with AIB regarding the establishment of a voluntary redress scheme for consumers who purchased card protection insurance from Pinnacle Insurance plc (Cardif Pinnacle) through AIB. Impacted customers will be contacted shortly by AIB, provided with an explanation of the issue and details of how to claim.

The Central Bank has published a report based on the period from January to June 2015 setting out the Bank’s performance against Service Standards that it has committed to in respect of (i) Authorisation of Funds, (ii) Authorisation of FSPs and (iii) processing of PCF “IQ” applications.

Central Bank publishes Guidance Note on Completing an Application for Authorisation as a Money Transmission Business

As the body responsible for authorisation of a Money Transmission Business the Central Bank published a Guidance Note to help firms completing the application for authorisation to the Central Bank. A final Guidance Note was also published in respect of the application for authorisation as a payment institution, a previous version having been published in July.

A new template for Special Purpose Vehicle (SPV) quarterly reporting and notification forms for the change of a SPV reporting agent and the addition or removal from the SPV list are now available on the Central Bank website along with SPV business validation rules.

Central Bank publishes guidance on Payment Statistics Return

Payment Service Providers (PSP) and Payment System Operators (PSO) resident in Ireland have a reporting obligation to the Central Bank (effective since December 2014). This Guidance Note is designed to help reporting agents complete the Payments Statistics Return. The returns also satisfy credit institutions’ reporting requirements as laid down in Regulation (EC) No 1409/2013 of the ECB of 28 November 2013 on payment statistics (ECB/2013/43). The primary aim of the return is to inform national and euro area policy-making.

Central Bank publishes the third issue of Credit Union News

The Newsletter includes several information updates, deadline reminders and event dates for credit unions as well as news items such as the review programme of lending restrictions for which submissions can be made until 30 September, 2015, the feedback statement on CP 88 and the Peer Review of Regulatory Functions in relation to Credit Unions for which the report is hoped to be published in September.

The Central Bank published notes on the compilation of the financial vehicle corporations (FVC) return. The document provides a helpful overview of the European FVC regime as well as help when completing the return.

The Minister has passed the European Union (Alternative Dispute Resolution for Consumer Disputes) Regulations 2015 (the Regulations) giving effect to Directive 2013/11/EU (the Directive) on alternative dispute resolution (ADR) for consumer disputes. The Regulations apply to procedures for the out-of-court resolution of domestic and cross-border consumer disputes concerning contractual obligations stemming from sales or services contracts, both online and offline. The Regulations only apply to complaints submitted by a consumer against a trader.

The Regulations designate the Competition and Consumer Protection Commission as the competent authority in the State for the purposes of the Directive and the enforcement of the Regulations. The Regulations set out the requirements which a dispute resolution entity must fulfil to be recognised as a qualified ADR entity, and specifies the information which a trader must make available to a consumer.

EU & INTERNATIONAL

EBA to conduct further analysis on NSFR and LR

Under the Capital Requirements Regulation (CRR) the EBA is required to elaborate calibration reports on Net Stable Funding Requirements (NSFR) and Leverage Ratio (LR). Following a request by the European Commission the EBA has announced that it will conduct further analysis to incorporate into its calibration reports on proportionality, the scope of application and the impact on markets of the calibration of NSFR and LR.

In line with their mandate to improve transparency, mitigate systemic risk and protect against market abuse, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published a consultative report with the purpose of developing global guidance on the harmonisation of data elements reported to trade repositories (TRs) and importantly for the aggregation of data by authorities, including the Unique Transaction Identifiers (UTIs) and Unique Product Identifiers (UPIs). The report focuses on the harmonised global UTI. The final objective is to produce clear guidance as to UTI definition, format and usage. The report seeks general and specific comments and suggestions from responders by 30 September 2015, to be sent to both the CPMI secretariat and the IOSCO secretariat.

The CPMI and IOSCO will also be issuing consultative reports in the coming months on the harmonisation of a first batch of key OTC derivatives data elements (other than UTIs and UPIs) and on the global UPIs and on other batches of key data elements other than UTIs and UPIs.

Application of the "Principles for financial market infrastructures" to central bank FMIs

The CPMI and the IOSCO have issued a short note providing guidance on how the Principles for financial market infrastructures (PFMI) applies to financial market infrastructures that are owned and operated by central banks. It develops what is said in the PFMI itself and further clarifies the interaction between the PFMI and central bank policies.

US Treasury Department extends comment period on marketplace lenders request for information (RFI)

The Treasury Department extended the comment period to give the public more time to respond to the RFI on marketplace lending titled “Public Input on Expanding Access to Credit through Online Marketplace Lending.” Treasury’s RFI seeks information about the business models and product offerings of online marketplace lenders; the potential for online marketplace lending to expand access to credit to historically underserved market segments; and how the financial regulatory framework should evolve to support the industry’s safe growth. The public will now have through September 30, 2015 to provide comments.

FCA and PRA new handbook and rulebook websites

On 29 August, 2015, the UK Financial Conduct Authority (FCA) is launching a new Handbook website to improve accessibility for firms. On the same day the PRA will launch its own PRA rulebook. The PRA and FCA have been working together throughout the development of the websites to ensure minimal impact on firms.

FCA launches PSR fees consultation

FCA published a Consultation Paper (CP15/26) setting out how it will allocate PSR fees between payment systems based on equal allocation across regulated pan-UK payment systems (with the two regional cheque systems, C&C and NICC, counted as a single system for fee allocation purposes). The CP also launches a public consultation on calculating and collecting fees from participants in each regulated payment system, the FCA's preferred approach being ‘indirect billing’ – direct members of regulated payment systems will be liable for PSR fees, which will be collected on the FCA's behalf by payment system operators. The consultation is open until 17 September, 2015.

The UK High Court awarded the Financial Conduct Authority (FCA) permanent injunctions and financial penalties against several foreign incorporated or resident defendants. It is the first time the FCA has successfully sought a permanent injunction for market abuse. The abuse was described as "sophisticated" and occurring across multiple trading platforms.

PRA launches fourth public consultation to redraft certain modules of its rulebook

The Consultation Paper publishes by the PRA on which it seeks comments proposes to replace the rules on cross sector groups, capital adequacy calculations for financial conglomerates, rules relevant to third country banking and investment groups, group risk systems and controls requirements and general provisions on reporting and compliance reports. The consultation closes on 13 November, 2015. At the beginning of the month the PRA published its policy statement laying out final rules and supervisory statements following part three of its public consultation. The policy statement includes rules on passporting, regulatory reporting and reverse stress testing. Also included are expectations regarding aggregation of holdings for the purpose of the prudential assessment of controllers, the internal capital adequacy assessment process (ICAAP) and the supervisory review and evaluation process (SREP), guidelines for completing regulatory reports (entering into force on 1 January, 2016) and internal governance.

HM Treasury launches Financial Advice Market Review

The review will examine how financial advice, considered in its broadest sense, could work better for consumers. Among other things the review will examine regulatory or other barriers firms may face in giving advice and how to overcome them; how to give firms the regulatory clarity and create the right environment for them to innovate and grow; the opportunities and challenges presented by new and emerging technologies to provide cost effective, efficient and user friendly advice services; and how to encourage a healthy demand side for financial advice, including addressing barriers which put consumers off seeking advice. The review will consult in autumn 2015 and report ahead of Budget 2016.

PRA launches Occasional Consultation Paper (OCP)

The OCP proposes miscellaneous and minor amendments to the Prudential Regulation Authority (PRA) rules and supervisory statements. The OCP proposes the deletion of the administrative fee for late regulatory reporting; amendments to Pillar II Reporting; amendments relating to Market Risk; amendments to Counterparty Credit Risk; amendments to the Certification Part of the PRA handbook and amendments to the Pre-Issuance Notification (PIN) Regime Applicable to CRR Firms and Insurers. The OCP is relevant to PRA-regulated firms with the particular relevance of each chapter detailed in the introduction to each chapter. Responses in relation to chapter 1 are requested by 14 September, 2015, while responses on all other chapters are requested by 14 November, 2015.